The S&P 500 fell 1.52% on Wednesday after the Federal Reserve held interest rates at 3.5% while PCE inflation stands at 4.1%, above the Fed’s 2% target for five years. The bond market sharply penalized this decision: the 30-year Treasury yield reached 5.23%, its highest level in 19 years. Roughly 65% of futures traders now expect a rate hike in September. Wall Street analysts were scathing: for Jon Hilsenrath, ‘the bond market puked on him,’ while Bank of America’s Mark Cabana called it ‘a classic central-bank credibility shock.’ The Nasdaq 100 has lost more than 10% over the past month, officially entering correction territory.
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